paypal vs. another merchant account

[Theophany]

I currently have a website that I built through soholaunch, I am accepting only paypal. I am getting feedback that people are deciding not to order from my website because I only offer paypal as a payment method. I do not have a great deal of sales per month. Any suggestions on what I should do?

THANK YOU!

[Vasili]

Re: paypal vs. another merchant account

Depends......on the type of site, the type of merchandise, your actual rate of conversion (visitors to actual buyers --- are you getting the traffic to justify investment of the costs involved compared to your 'competition'), your product selection depth/prices, etc.....
Although it is true that many online businesses use PayPal because they cannot qualify for Merchant Accounts because they are not truly "businesses", the credibility gap of PayPal has narrowed a lot recently, making it difficult for consumers to accurately attribute credibility solely based on such an observation.

Offering the same methods of payment (credit card wise, that is) as Paypal sans the Bill Me Later and electronic check modes (which you wil pay additional for with Merchant Accounts) makes no sense marketing-wise if only to trade off a fraction of a point in the discount rate and the $5 or so difference in the minimum fee, UNLESS the real reluctance is more focused on the "Rating" system PayPal has and/or whether or not you are using an SSL secure site (identity theft and credit fraud is a big issue still!). If you are not using SSL, the most logical evolution would be to upgrade your PayPal account to do so, and THEN evaluate if it is a PayPal issue or a site-related issue (SSL, or other element)....

First question I have for you is where did you hear this report? Specifically, how did you come to this realization? Was it from one or two random emails, or the result of an email survey you conducted? (Point is, how reliable is the information you are so quick to base action upon?)

It is good to take regular "readings" of where you are in your market segment, and how you are performing to the model you have committed to, but re-thinking your Business Plan is not quite a simple undertaking, nor should it be. Stand back and deal with each 'symptom' as part of a whole, and then you can reasonably develop a 'cure'......

[Theophany]

Re: paypal vs. another merchant account

Thank you for your very educated reply. I sell handmade sewn items, my sales are slowly increasing, but average only $200/month. I have called several places re: merchant accounts. One place told me that I could set up a merchant account and call in the credit card numbers once an order is placed through my website. This would cost $10/month a percentage of the charge and a $39.99 set up fee. To me this makes sense. Perhaps I am misinformed and this is not a secure or appropriate way to handle credit card payments.

Any advice or suggestions you may have would be greatly appreciated.

Thank you

[Vasili]

Re: paypal vs. another merchant account

One place told me that I could set up a merchant account and call in the credit card numbers once an order is placed through my website. This would cost $10/month a percentage of the charge and a $39.99 set up fee. To me this makes sense. Perhaps I am misinformed and this is not a secure or appropriate way to handle credit card payments.

No, this is not a valid option, in my professional opinion for a number of reasons:
1. Third-party processors are not guaranteed nor underwritten (your funding is never secure, and depends on nothing but how much you trust them to pay you).
2. Third-party transactions are not permissable by VISA/MasterCard whatsoever, and if they were so informed that a party was co-processing, they would be shut down immediately as it is 'illegal.'
3. Third-party processing is not secure (and therefore not allowed) per section 326 of the Patriot Act, which stipulates that you as recipient of funding and personal information (identity and credit card info) certify that the handling of such data is proprietary and not "distributed" in any way whatsoever; MasterCard (and now VISA also) has a certification program in place to provide consumers the assurance and to demonstrate compliance with Federal law (SecurePay/SecureCard), but it is based on direct-to-merchant enforcement and data security measures, and third-party processing abrogagtes these systems entirely.
4. Unless this "provider" issues you a Universal Merchant ID Number (to identify you withion the entire system uniquely), you are collecting money and transacting business using "banking instruments (credit cards) illegally" according to Federal Charter, Universal Merchant Agreement, and Terms of Conditional Use. A valid Merchant ID also allows you to "call in" to VISA/MC/Amex directly for approval, so why would you need to use a co-processor???

I think you can see the differences here.....

A regular Merchant Account available through any bank is usually restricted to valid Business Accounts (checking) only, and that is why the rise in PayPal use (who offers their service to anyone, regardless of "entity structure": individuals and businesses alike). Typically, the discount rates available through Merchant Accounts vs. PayPal are anywhere from 0.15-1.2% less, along with other fees, which can add up depending on the volume of transactions you process......and that is why there are so many different rates quoted out there: it is all based on your average ticket, the "risk" assigned to your business classification, type of equipment to process, etc.

And....there are special requirements levied to online business Merchant Accounts as well. It is all about making sure all the laws are complied with and that the US Banking procedures are followed legitimately.

* For you type of business, and the "risk" value you present, I would not recommend either the third-party processor option you mentioned above, nor do I think your projected volume would warrant applying for a Merchant Account or upgrading whatever PayPal type of account you have ---at present.
> Instead, I would seriously consider updating your site itself, and investing in a cognizant and ethical SEO program (a real professional one, not a do-it-yourself attempt) to increase your overall value and marketability.....go out and get more customers of the kind you need rather than coddle the marginal ones your site is currently "serving."

THEN you can make a move to "upgrade" your payment options more effectively to meet current and real needs effectively, rather than strive to "fix" something that won't make a difference in the long run anyway!
(Bottom line: do what makes sense to make enough profit to re-invest in a system that expands as does your business)

[Vasili]

Re: paypal vs. another merchant account

Correction: it is section 526 of the Patriot Act!~

I got timed out before I realized I rattled off the wrong "number"....

[Karen Mac]

Re: paypal vs. another merchant account

A standard merchant account processes your payments much the same as paypal. You dont need to be calling them in. Further, encryption allows you to process the payment via a gateway without actually having to maintain the CC numbers. You would NEED an SSL and dedicated ip to run most standard CC processors legally. This is actually safer than using a PHONE Line which 99% of people using a wireless fone, or cell fone for transactions. You really want to avoid having to CALL IN CC numbers for this reason. A standard GATEWAY allows you to login in securely and run any manual transactions you might need ONLINE.

I didnt look at your site, but if you put some information that paypal SECURELY accepts CREDIT CARDS and encrypts the information without NEEDING to set up a paypal account, you might convert more of those customers. You can set this option in your paypal settings in the profile section, website payment preferences I believe. Maybe you have it set to forcing them to make a paypal acct.

Also check into paypals verification seal and do a web search for ISAFE. Its a LOW one time payment that verifies you are the webmaster of the site and does help to build some confidence. MOST customers wont know that its not a SSL logo etc, it just gives some credibility.

If you are savvy, i dont believe you need to invest in an EXPENSIVE SEO guru either. You managed to get a commercial site up, I have every confidence you can begin to learn SEO and managing a PPC with ROI stats just fine. Find Bethers here on the forum and download her ebook linked in her signature as a starting point. Then look at joining up with some reliable SEO news letters. If you need a list of some of the better ones and better sites, just email me, Ill be happy to provide them for you.

Karen

[Vasili]

Re: paypal vs. another merchant account

"PPC with ROI stats"?? LOL

...."seriously consider updating your site itself, and investing in a cognizant and ethical SEO program (a real professional one,* not a do-it-yourself attempt) to increase your overall value and marketability" still sounds more real and down-to-earth (or "do-able") to me, IMO!

* Or, the absolutely best model plan you can create incorporating proven best practice and current axioms to produce the optimal results required, and not one based on outdated or genericized "stuff of primers".....

[Karen Mac]

Re: paypal vs. another merchant account

YES Eric, ROI, return on investment. You can learn to manage PPC until you move up naturally very easily without PAYING someone else for it, and learn to understand the STATS and make them work for you.

It all depends on what the user wants, how much they want to invest and learn, etc etc. Youre too used to that SILVER SPOON shoved in your mouth and so you easily BUY what u dont want to bother with!

Karen

[Vasili]

Re: paypal vs. another merchant account

YES Eric, ROI, return on investment. You can learn to manage PPC until you move up naturally very easily without PAYING someone else for it, and learn to understand the STATS and make them work for you. It all depends on what the user wants, how much they want to invest and learn, etc etc. Youre too used to that SILVER SPOON shoved in your mouth and so you easily BUY what u dont want to bother with! Karen

I am very well aware of ROI and what it means in business, as I am paid to provide the best ROI for all of the services I provide to genuine businesses in various industries. There is no tolerance for BS, and when the rubber hits the road, it comes down to real numbers and not nuance.

There is no such thing as "ROI on stats": you can only have a return on investment if there is a manner of measureable resturn or potential, and risk of depreciation, and this refers usually to a product, program, or dynamic operation (such as a process or prescription, like anything from a training program to an application applied to manufacturing); and "stats" (or statistics) are concrete static data numbers either individually or referentially grouped to comprise a new perspective or composite.
> There is potential ROI on a program, and only if a real program (not some basic pile of half-understood concepts Mickey-Moused into a look-alike outline) includes the essential ingredients for action, identifiable results, and definable goals. This is because the investment is not limited to purely capital: it could be "sweat equity", time, contributions from outside sources, and the like.

Pay Per Click programs are a total waste of money and are worthless to all but the very low-rung websites who are desperate enough to pay to deliver the very least desirable and typically the most non-converting visitors.
Granted, the hard-click visits do add to the overall balance of increased metrics by sheer contribution of their visit (although it is always better to deliver to interior pages rather than the main page -- something PPC fans fail to grasp as well), but they are only perpetuating both the myth of their effectiveness and the profitability of Google, Yahoo, and the others who force-feed this pabular program onto unsuspecting websites. Why do you think they simply give away PPC credits? They know that those incapable of properly preparing and managing their websites will gradually become dependent on this type of program for all traffic, rather than learn to develop dynamic content, evolving optimization methods, and updated sites altogether!

Silver Spoon? Really.....I thought the days or flinging poo were over with!
I am the first to encourage our VH peers to take the time to really plan, to learn, and to engage in methodical development of their websites, knowing that they will reap the rewards in direct proportion to their own efforts and time invested. For the most part, that is the one thing they can do for free that will have the greatest impact on their level of success they will find possible to attain, for there can be little added on later in any manner of program or process (self-implemented or paid for) that will have a positive impact if the foundation and clearly cognizant plan itself is not sound or capable of sustaining a higher degree of technical enhancement! The website needs be built with care to detail, and in a manner worthy of presenting to the web itself" there is no excuse for cutting corners or to expect instant results, especially for websites that are rudimentary at best.

The ability to perform true and effective elements of optimization for the majority of websites encountered here in VodaTalk are severely limited at best. In fact, much discussion and tossing about of terms and half-explained concepts have given rise to a mis-conception of optimization altogether, for most of the precepts "shared" herein are really nothing more than pre-optimization, and rarely are they even implemented accurately. Page Title, Key Words, Description, and H-Meta are indeed important (as they are core to optimization), but that is not the top of the mountain. Clean code, KW valuations and current search results, market stance, competitor placements, and more all have direct bearing on the development/rotation/relevance/permanance of PT, KW, and Description and their use: it takes a lot of time and true understanding to source the information to begin to relate it to this "simple" task, and many "professionals" themselves are not really up on it!

Real optimization (as a program) includes efforts applied outside the site itself, as you know, such as articles, blog and forum posts, "link seeding" (I hate that term and practice, unfortunately, but it needs be done), balanced link strategy, and even affilate programs....anything to build credible relevance across the web to generate easily motivated hard metric traffic....again, part of a cohesive overall plan worth developing. And, many of these elements can be performed without relying on outsourced talent, but usually the time it takes to develop each part and implement them usually means that they are deployed incoherently and without much effect or impact (often they are too old or without "bearing" anymore, and lose real 'relevance'). This is why for the most part, once the basic structure of a compliant website is reached, for those seeking raid development of optimally motivated traffic and site elevation/evolution, buying into a professional optimization service for at least 6 months (and as short as one year) makes sense.
IN LIEU OF THIS OPTION, 'webmasters' themselves need to create a detailed plan of their own, invest the time and effort to make it implementable and self-managable, and to become capable of instituting it themselves ----- and thus the ROI on a "program" that I emphasized and suggested.... not on "stats" (statistics), for they are what they are, and are the result of out-of-reach variables: you cannot 'invest' in how many XP or Mac visitors will arrive, or predict how many from the Netherlands, nor even how many will come at all for example!

Maybe you intended something altogether different with your "Silver Spoon" comment? I would tend to agree if you were trying to nail down my penchant for complete integrity, and for demanding the same from others: I speak only to that which I know, have experience in, and can provide defense for in any situation or environment. And I certainly do not reach higher than my understanding, nor do I expect anyone else to either. Yes, I am not unfamiliar with paying others to do things, but I know to the n-th degree what I expect to be done, and in what manner, often demanding things not done before (which prove to be both enlightening and "lively" shall we say): I simply do not have the time to fiddle-fart around experimenting or myopically focusing on minutia like some, for my time is rigidly structured between daily operations and "developments".

That is why I encourage my peers to do everything they can themselves with a broader understanding than a mantra that they pick up anywhere, and to be aware of a greater set of understandings that they deserve to be exposed to so they might have the opportunity to select which they might find contributory to their own situation. And...there comes a time that you can't always be expected to do it on your own, but when approaching an outside provider with a pre-determined plan or details of actions, you will not only get a better ROI but predicatable results.


PS: IMO

[Karen Mac]

Re: paypal vs. another merchant account

LOL.. I wasnt MUD Slinging, just in general giving my opinion on why you want everyone to spend dollars they MIGHT not have. I simply forgot a COMMA in there, but most knew exactly what i meant... and PPC is not just for lowly websites, you often see Target, Walmart, ZALES et al in PAID ads.

For a beginner, PPC is often the quickest way for them to begin achieving sales with low end investment. Choosing Keywords and using the related stats for what works and what doesnt, what gets them sales etc gives them a better chance at getting even with their investment. I agree that ppc isnt the ONLY thing they should be doing, but this and beginning to learn SEO is the most likely place to get them sales and traffic in the short term while they continue to IMPROVE.

I by NO means intend for this to become a struggle of word play, but simply to HELP someone out. We all learned somewhere ERIC! Yourself included. If you jump out the gate paying for EVERYTHING, you most likely will NEVER learn it, but continue paying.

Theo, I apologize for your thread getting HIJACKED, with things you didnt ask for. Was trying to help.. Offer still stands.. email me.

Karen

[Vasili]

Re: paypal vs. another merchant account

A regular Merchant Account available through any bank is usually restricted to valid Business Accounts (checking) only, and that is why the rise in PayPal use (who offers their service to anyone, regardless of "entity structure": individuals and businesses alike). Typically, the discount rates available through Merchant Accounts vs. PayPal are anywhere from 0.15-1.2% less, along with other fees, which can add up depending on the volume of transactions you process......and that is why there are so many different rates quoted out there: it is all based on your average ticket, the "risk" assigned to your business classification, type of equipment to process, etc.

And....there are special requirements levied to online business Merchant Accounts as well. It is all about making sure all the laws are complied with and that the US Banking procedures are followed legitimately.

* For you type of business, and the "risk" value you present, I would not recommend either the third-party processor option you mentioned above, nor do I think your projected volume would warrant applying for a Merchant Account or upgrading whatever PayPal type of account you have ---at present.
> Instead, I would seriously consider updating your site itself, and investing in a cognizant and ethical SEO program to increase your overall value and marketability.....go out and get more customers of the kind you need rather than coddle the marginal ones your site is currently "serving."

THEN you can make a move to "upgrade" your payment options more effectively to meet current and real needs effectively, rather than strive to "fix" something that won't make a difference in the long run anyway!
(Bottom line: do what makes sense to make enough profit to re-invest in a system that expands as does your business)

I didnt look at your site, but if you put some information that paypal SECURELY accepts CREDIT CARDS and encrypts the information without NEEDING to set up a paypal account, you might convert more of those customers. You can set this option in your paypal settings in the profile section, website payment preferences I believe. Maybe you have it set to forcing them to make a paypal acct.

Also check into paypals verification seal and do a web search for ISAFE. Its a LOW one time payment that verifies you are the webmaster of the site and does help to build some confidence. MOST customers wont know that its not a SSL logo etc, it just gives some credibility.Karen

That is essentially all that needs be remembered in this thread, IMO, so if some intelligent Moderation would be applied, the Community at large would benefit, as would Theo....


I have found it increasingly and unecessarily 'unproductive' to continue, and encourage all to turn to other members apparently worthy of meriting your confidence...